Democratic Party leader Renho is leaning toward replacing Secretary General Yoshihiko Noda following the main opposition party's lackluster showing in the recent Tokyo metropolitan assembly election, a party…

Purnendra Jain
Security, Asia
Evolution or revolution?
After decades of a self-imposed ban on arms exports, the Abe government in 2014 began to allow the country’s producers to export arms and military equipment. This is a significant development, albeit part of an evolutionary and incremental process. Still, it will be a while before Japan appears on the list of major global arms suppliers.
The 2014 ‘three principles on transfer of defense equipment and technology’ replaces the 1967 ‘three principles’ which virtually banned arms exports. While allowing exports of weapons in support of its proactive contribution to peace policy and to serve Japan’s national interest, the new principles still maintain restrictions on arms exports to those states that are either under UN embargoes or currently involved in a military conflict. The new rules also seek greater transparency to ensure that weapons exported from Japan are not sold to third parties without Japan’s knowledge.
Even before the new principles, Japan had made small changes in its defense cooperation and military technology transfer, allowing cooperation with the United States and joint research on ballistic missiles and missile defense. The then-ruling Democratic Party of Japan under Prime Minister Yoshihiko Noda in 2011 also allowed Japanese arms manufacturers to forge joint development projects with foreign weapons manufacturers and export defense-related equipment for humanitarian purposes.
While not strictly military, Tokyo has controversially donated patrol vessels to some Southeast Asian nations, such as the Philippines and Vietnam, using its foreign aid budget. Again, this was ostensibly in support of maintaining peace. It has also leased a TC-90 training plane to the Philippines and even provided training to Philippine naval pilots to fly the aircraft.
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In mid-December, the leaders of Russia and Japan will hold a summit that is bound to discuss the 70-year old Southern Kuril Island territorial dispute and a related package of economic cooperation.
5 cities with a Russia-Japan historical connection
While the meeting has been hailed by the Russian and Japanese media as historical chance and, indeed, a lot is at stake for both sides in this “tug-of-peace,” the key challenge will be to maintain a long-term commitment and motivation after the summit, should the actual territorial negotiations gain traction.
Vladimir Putin last visited Japan in 2009 during his prime ministerial tenure. Since Shinzo Abe returned to power in 2012, he has pursued a vigorous foreign policy “taking a panoramic perspective of the globe.”
A new visit by President Putin has been on the cards since 2013 but was impeded by the G7’s response to the Ukrainian crisis. Nonetheless, Russia’s tensions with the West did not prevent the Japanese leader from meeting Putin more frequently than U.S. President Barack Obama.
Special attention to Russia
Abe’s proactivity (or even hyper-proactivity) and pragmatic cooperative approach towards Russia, unprecedented in scale and ambition, marked a strong contrast not only between him and other Western leaders but also between him and many of his predecessors.
Trump's victory will not affect Abe’s plans to improve Russia ties - expert
The prime minister consistently filled the deal pipeline of bilateral cooperation with concrete projects of mutual interest – with relevant publicity in the Japanese media, which was unimaginable a decade or two ago.
He further raised the profile of his economic charm offensive by appointing Hiroshige Seko, head of the key Japanese Ministry of Economy, Trade and Industry, as the first ever minister in charge of economic cooperation with Russia.
On the Russian side, in contrast to past attempts at reconciliation, several top government officials assigned a high priority to the development of a detailed economic cooperation package. Among them are Deputy Prime Minister Igor Shuvalov, Industry and Trade Minister Denis Manturov and, until recently, Minister of Economic Development Alexey Ulyukayev, whose arrest was likely met with concern on the Japanese side but so far appears to have had little effect on bilateral relations.
The continuity of Abe’s conciliatory stance on Russia will limit any criticism from the prime minister’s predecessors who now sit in the opposition.
At the same time, Abe and his foreign policy adviser Shotaro Yachi kept alive other channels of strategic communication with Russian establishment figures such as Secretary of the Security Council Nicholay Patrushev, then-speaker of the lower house of parliament Sergey Naryshkin and the upper chamber speaker Valentina Matviyenko.
Having said that, one should keep in mind that it was under the Democratic Party of Japan’s Prime Minister Yoshihiko Noda that Tokyo began a slow rapprochement with Moscow in 2012, around the time when then-Prime Minister Putin was showing off some knowledge of Japanese terms, such as “hikiwake (a draw or tie in judo)” and “hajime (beginning).”
The continuity of Abe’s conciliatory stance on Russia will limit any criticism from the prime minister’s predecessors who now sit in the opposition.
Six-decade stalemate
A two-day series of talks in, firstly, Nagato, Yamaguchi Prefecture and, secondly, Tokyo will (intentionally or unintentionally) mark 60 years since the 1956 Soviet-Japanese declaration was ratified by the parliaments of both countries.
Vladimir Putin drops hints about a solution to the Kuril dispute
President Putin and Foreign Minister Sergey Lavrov have reiterated that the document remains the basis of Russia’s approach towards the resolution of the Southern Kuril Island problem.
While Abe proposed a new approach, he also recognized the importance of the 1956 declaration for Russia’s approach, thus hinting at a drift from the 1993 Tokyo declaration and therefore from the intransigence of numerous previous leaders to the possibility of a compromise.
By doing so, the Japanese leader demonstrated not only initiative and reliance on strong personal ties with foreign leaders but also something that has long been missing from bilateral dialogue – a robust political will.
The modern-day Russian public views even the handover of smaller two islands rather negatively, which narrows the range of bargaining options – or, at least, their public discussion.
According to some Russian experts, such as Tokyo-based historian Vassily Molodiakov, the sensitivity of the Kuril Island debate in Japan was somewhat heightened by the nation’s post-war politicians.
Namely, the general public was led to believe that all four islands are bound to become Japanese, even though such a promise was unrealistic and borderline populist, since the politicians in question did not have the physical ability to actually deliver on it.
The USSR until Mikhail Gorbachev opted not to recognize the fact that the dispute even exists – somewhat in the way the Japanese leadership treats the Senkaku dispute.
The modern-day Russian public views even the handover of smaller two islands rather negatively, which narrows the range of bargaining options – or, at least, their public discussion.
Economics trumps politics
Still, to date the Russian leader has been demonstrating willingness to seek the resolution of the territorial dispute with Japan and to build trust with the Japanese leader. At the same time, in the long term the clock plays against Japan given that the islands have been long administered and controlled by Russia.
In terms of international security, it is North Korea and China not Russia that cause the most concerns for Japan.
One may argue that it is Abe who has the best shot (and some time, given the likely continuation of his leadership until 2021) at achieving any kind of breakthrough on the matter, as his successors and their audience may instead prioritize pressing domestic economic issues, rendering the Kuril dispute more marginalized.
Will it be difficult for Abe to sell the deal to the public? Most projects envisaged to be funded or supported by Japanese entities in the Russian Far East are bound to benefit Japanese investors and trading houses whose overseas operations the Abe cabinet has been consistently promoting.
Furthermore, the strengthening of energy ties via enhanced supply of coal, liquefied natural gas (LNG) or even electricity from Russia would be welcome, given the Japanese public’s staunch opposition to Abe’s plan to revive nuclear power generation. In terms of international security, it is North Korea and China not Russia that cause the most concerns for Japan.
The U.S. equation
Now to the “elephant in the room.” What implications does Donald Trump’s electoral victory have for the prospects of a Russo-Japanese peace deal? Prima facie, Trump’s campaign rhetoric suggested less interventionism, so he and designate National Security Adviser Mike Flynn seem likely to drop any prospects of hindering Russo-Japanese rapprochement, especially if it comes to the subject of balancing China.
Some might argue that Abe’s vigorous engagement of Russia was partially predicated on the expectation of Hillary Clinton’s win, which would keep Russia’s bargaining power rather low due to sanctions and further attempts at isolation.
At the same time, campaign rhetoric may change after the inauguration and much will depend on the actual personality of not only the new Secretary of State but also the new American handlers of the U.S.-Japan alliance.
Some might argue that Abe’s vigorous engagement of Russia was partially predicated on the expectation of Hillary Clinton’s win, which would keep Russia’s bargaining power rather low due to sanctions and further attempts at isolation.
Indeed, with Trump in the White House, that opportunistic motivation may be weakened. Nevertheless, Abe’s quest to improve ties with Moscow actually started as early as 2013 and therefore pre-dated post-Crimean sanctions.
Furthermore, he has already displayed his determination to rely on personal ties by becoming the first foreign leader the U.S. President-elect met in person. In parallel, the Japanese leader demonstrated consistency in defiance of changing circumstances by pushing the Trans-Pacific Partnership ratification through the Diet (Japan’s bicameral legislature) even though Trump’s victory has all but buried the agreement’s prospects.
Unpredictable outcome
Bearing in mind the above-described uncertainty and Abe’s inclination to hold sensitive negotiations behind closed doors, little tangible detail is likely to emerge prior to the actual summit. And it is in the interest of both parties to keep it real and manage expectations.
The December summit might mark the beginning of an actual compromise between Russia and Japan, but this can only be the first of many steps. However, the two countries have never been as close to a breakthrough as they are now.
The writer is a doctoral candidate, at the faculty of Asian and Middle Eastern Studies, St. Catharine's College, University of Cambridge. He has been active in projects involving academics in Japan, Kazakhstan, Uzbekistan and Azerbaijan.

Bill Below, OECD Directorate for Public Governance and Territorial Development (GOV) Are policy makers stuck in time? That may explain why incremental issues that cumulate and creep slowly across the temporal dimension pose such huge challenges. Politicians are clearly more comfortable in the here and now. Harder to deal with are slow-moving emergencies such as climate […]

Japan will send the wrong message about its commitment to fiscal reform if it shies away from a sales tax rise in October 2015, former Prime Minister Yoshihiko Noda said on Friday. But Noda, whose Democratic Party was ousted in the 2012 election that brought Prime Minister Shinzo Abe back…

Former Prime Minister Yukio Hatoyama said Monday that he will leave the opposition Democratic Party of Japan, which he helped establish.
Hatoyama, 66, did not run in last December's general election, saying the DPJ had lost its way under Prime Minister Yoshihiko Noda and was no longer the same party…

UK Only Article:
standard article
Issue:
Xi Jinping and the Chinese dream
Fly Title:
Japan’s public debt
Rubric:
Shinzo Abe’s government looks likely to disappoint on fiscal consolidation
Location:
TOKYO
TO REVIVE Japan’s economy Shinzo Abe, its prime minister, has loosed three arrows. Temporary fiscal stimulus, monetary easing and structural reform together make up the strategy known as “Abenomics”. But many reckon there needs to be a fourth dart in the quiver: fiscal consolidation over the longer term to tackle the country’s vast public debt, which is expected to approach 240% of GDP next year (see chart).
Mr Abe’s party, the Liberal Democratic Party of Japan (LDP), last year co-operated with its main rival, the Democratic Party of Japan (DPJ), to pass a bill to raise the consumption tax from 5% to 8% in April 2014 and up to 10% in October 2015. For Yoshihiko Noda, the DPJ prime minister at the time, the bill represented the end of a crusade by his party to get Japan back on fiscal track. ...

The Nagoya District Court on Tuesday sentenced a man to nine years in prison for holding four hostages in a bank for more than 12 hours last November while demanding former Prime Minister Yoshihiko Noda resign.
The court heard that Koji Nagakubo, 32, began the siege at 2 p.m. on…

Former Japanese Prime Minister Yoshihiko Noda has told fellow lawmakers that nights of hard drinking with visiting dignitaries formed part of his diplomacy.
Noda, a well-known aficionado of sake, said he "chugged" down cups of the rice wine with then-U.S. Treasury Secretary Timothy Geithner and separately with British Prime Minister…

Tatsuo Hirano, who was the reconstruction minister in the government of former Prime Minister Yoshihiko Noda, said Tuesday that he plans to leave the party and run as an independent in the summer's crucial upper house election.
Hirano, 58, is from Iwate prefecture. His decision to leave the DPJ is…

Currency wars again took another leap forward this week as Japan’s Economic Minister Wants Nikkei to Surge 17% to 13,000 by March.
Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March.
“It will be important to show our mettle and see the Nikkei reach the 13,000 mark by the end of the fiscal year (March 31),” Amari said in a speech.
“We want to continue taking (new) steps to help stock prices rise” further, Amari stressed, referring to the core policies of the Liberal Democratic Party administration — the promotion of bold monetary easing, fiscal spending and greater private sector investment.
The key index started rallying from around 8,600 points in mid-November when then-Prime Minister Yoshihiko Noda decided to hold a general election Dec. 16 that saw his ruling Democratic Party of Japan trounced by the LDP. Share prices have risen largely in response to the yen’s depreciation against other major currencies on expectations for aggressive monetary easing measures by the Bank of Japan since the LDP’s return to power.
Contender for Bank of Japan Supports Additional Easing
In addition to stock market cheerleading and targets from Japan's economy minister, Yen Weakens as Candidate for Bank of Japan Promotes Easing.
Japanese stock futures rose and the yen weakened after Haruhiko Kuroda, a potential contender for Bank of Japan chief, said additional monetary easing can be justified this year.
“If we do see a BOJ Governor of Kuroda’s calibre, the dollar-yen could well punch through 95 and would head to 100 very quickly,” said Evan Lucas, Melbourne-based market strategist at IG Markets Ltd., a provider of trading services. “It would also signal to Japanese consumers and investors alike that the government is finally taking action.”
For the record, I have been in on a long Japanese equities, short the Yen play for quite some time.
Yet, I do not pretend to know whether or not the Nikkei will soar another 17% by March. However, I do know that it is economically foolish for politicians to hijack currencies and stock markets. Thus, my positioning is certainly not an endorsement of Japanese policy.
At some point, and perhaps we have crossed the point already, currency wars can and will get out of control. If and when that happens, the Yen will spiral downward out of control, with energy prices (in Yen) skyrocketing. Moreover, Japanese exports may not necessarily rise as everyone believes.
Sentiment is a powerful thing. Convincing everyone in Japan that a huge outburst of inflation is on the way, is not the brightest thing to do, to say the least. As I have stated many times, Japan better be careful or it may get (and then some in spades) more of what it seeks.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.comMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

New opposition Democratic Party of Japan (DPJ) leader Banri Kaieda said Saturday he is willing to consider alliances with smaller opposition parties in the lead-up to next summer's upper house election.
Kaieda -- who replaced former Prime Minister Yoshihiko Noda as party leader -- said he was willing to work…